ERISA

Do Over?

06.09.2023

 

Unfortunately, despite research that shows most retirees harbor a lot of “should have, would have, could have” related to their savings and financial plans, there is no going back. Though do overs are impossible, experts remind us that annuities offer what many retirees wish for: a guaranteed paycheck and protection from market fluctuations.

 

A Wish For Regular Income

Starting earlier and saving more are the laments of many current retirees. Another wish, according to a new Lincoln Financial Group study, is for a steady stream of income through retirement. Reporting on the data, 401k Specialist shares:

 

More than 60% of retirees would like to go back and plan differently for their retirement if they could…with the vast majority saying they wish they’d started saving earlier and saved more for retirement.Other “would’ve, could’ve, should’ve” reflections include choosing investments that provide a steady stream of income, with 63% reporting they’d like to receive an automatic paycheck from their retirement assets; and planning better for the unexpected like inflation and volatility, with 85% interested in investing in solutions that protect them from losses during market volatility….“There aren’t many opportunities for a do-over when it comes to retirement planning. Yet, two of the major concerns that retirees voiced in our study—guaranteed income and protection from loss—can be addressed with annuities,” said Tim Seifert, senior vice president… at Lincoln Financial.

 

As our population ages and retires in record numbers, there is in fact movement in the adoption of annuities into retirement strategies, and financial experts believe educating plan participants about the benefits of annuities is important. The unpredictability of the past several years may account for increasing receptivity to the guaranteed lifetime income and protection from market performance that annuities offer:

 

With economic conditions remaining favorable for the individual annuity market, LIMRA recently reported the first quarter of 2023 saw the highest quarterly U.S. individual annuity sales ever recorded. LIMRA expects that individual annuity sales will remain strong in 2023….For two decades, annuity sales hovered around the $200 billion to $250 billion range. LIMRA’s forecast suggests that protection products will continue to boost growth in the annuity market for the next several years….Going forward, demographics will affect the future of annuities with more people reaching an age where they would consider purchasing one. The average age of an annuity buyer is in their early 60s with the majority purchased between ages 55–70. According to Oxford Economics, the U.S. population aged 65 or over is expected to grow by more than 8.3 million from 2022 to 2027.

 

With the financial well-being of workers increasingly a worry for businesses of all sizes,  plan sponsors across the country are exploring new options. The Society for Human Resource Management encourages: “Being thoughtful about plan design can dramatically improve employees’ chances of accumulating wealth and achieving a secure retirement.” Experts remind plan sponsors that in addition to taking action to comply with the new SECURE 2.0 measures, they should also consider the many optional provisions in the legislation that could position the company plan to better meet the needs of employees. As Plan Sponsor sums up: “This is a great opportunity for committee members to take a step back and ask whether their plan is the way the that they want it to look….Start with those internal conversations about employee needs, and what are the changes that you have been wanting to take action on?”

 

When exploring potential design changes for the company sponsored plan, it’s also critical to update the protection plan for the  business, the retirement plan—andthe plan fiduciaries. After all, you wouldn’t want to be without coverage in the face of even the allegation of a fiduciary breach. If you suddenly need an ERISA defense attorney, the cost is $600—per hour.  At Colonial, a whole year of Fiduciary Liability coverage is less than a few dollars a day, and we even include Cyber Liability coverage to protect your business and retirement plan in the event of a cyber breach. Remember, cyber breaches can quickly escalate into fiduciary breaches. Avoid disaster:choose your affordable plan sponsor protection package here in minutes.

 

Armed with Colonial’s liability coverage, if you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be protected with defense costs and penalty limits up to $1,000,000. Uniquely, Colonial even includes Cyber Liability Insurance, locks in multi-year rates and offers installation payments. Conveniently, our Fiduciary With Cyber liability package is now available with a one year commitment. Protect yourself and your business, for a few dollars a day, now:

 

Fiduciary With Cyber Liability Insurance Right Here.

 

 

Pension plan professional? We’re here to help you with your plan sponsor clients—and we’ve got you too. From  Errors and Omissions Insurance to Fiduciary Liability Insurance, Employment Practices Liability Insurance–and more, we’re HERE with the coverages pension professionals need to keep the business going—and growing. Insurance for Pension Professionals Right Here.

 

 

Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country. Serving customers since 1930, we are the trusted source for the pension industry to secure legally required ERISA bonds, fiduciary liability insurance and cyber-liability insurance. We help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.